What is transport demand?

The demand for transport is a derived demand, an economic term, which refers to demand for one good or service in one sector occurring as a result of demand from another.

Users of transport are primarily consuming the service not because of its direct benefits, but because they wish to access other services.

Transport demand is about the movement of people and goods and we travel in order to satisfy a need (work, education, recreation etc) and we transport goods as part of the overall economic activity.

So for example, work-related activities commonly involve commuting between the place of residence and the workplace. There is a supply of work in one location (residence) and a demand of labour in another (workplace), transport (commuting) being directly derived from this relationship, hence a derived demand.

Transport can also be perceived as an induced or latent demand, that is a demand response to the addition of transport infrastructure results in traffic volume increases.

In economic terms this is due to the reduction in the price of a commodity, in the transport context an increased mobility, results in the lower perceived cost of travel (reduced travel time or delay or improved reliability), hence increase in demand.

Additional road capacity results in mode shifts, route shifts, redistribution of trips, and generation of new trips as well as longer trips.